The Myth Of The Catastrophe Of The 3% Return On Bonds
Lukas Daalder (Robeco) | Investors are making the mistake of focusing on 3%, believing the returns on US fixed income securities augur a decline in equities
bonds
The ‘antiestablishment’ pact in Italy augurs a rise in the country’s public deficit
Paula Sampedro (Link Securities) |There are various fronts open on the political front during this week. Specifically, the Italian political parties La Liga (extreme rightwing) and the Movimiento Cinco Estrellas (anti-establishment) are expected to present their programme for government to the country’s president Sergio Mattarella, after reaching an agreement to form a new government in Italy.
US 10-Year Bond At Highest Level For 10 Years Not Intriguing But 2-Year increasingly Lower Is
The interest on the US 10-year bond has reached 3%, its highest level in 10 years (blue line). There is nothing exceptional about this given that, as we can see in the graphic, expected inflation has also taken off.
The Euribor Shows Signs Of Life, Rising One Basis Point
Yesterday, April 19, after being flat for months, with no pulse, the Euribor finally showed signs of life. It moved from the range of -0.190% (average for April) to -0.189%. One basis point.
Equities vs bonds: buy real returns
One factor that could alter the judgement on current stock market prices are long-term interest rates, indicators of the alternative no-risk returns to the stockmarket, which are not fixed directly by the central banks but by the market itself.
Spanish bond prices do not reflect the Catalan “issue”
Spanish bond prices are not reflecting the risk of Catalan secession simply because the foreign economic press doesn’t rate the likelihood of it happening, nor the conflict which will follow 1-O.
German Or US Bonds: Who Is Following Who?
Analysts at Julius Baer think it is “comforting” to see that the bond market is efficient. In other words, they say that for German bond investors it is basically the same whether they invest in negative- yielding German Bunds or buy US bonds and pay for the hedging of the currency risk.
Stock Markets: Levels And Fundamentals
Various world-renowned experts are increasingly doubtful that the stock markets’ level is sustainable. But there is still huge euphoria. While money remains cheap, in relation to the expectation of gains, speculation will continue.
Inflation-Linked Bonds Are Back Against A Backdrop Of Rising Prices
Ofelia Marín-Lozano | As inflation increases, the TIPS (treasury inflaction protected securities) are the asset which offer the best peformance, ahead of commodities and equities (….)much better than traditional bonds in the case of rising inflation, very similar in the case of a decline in activity and worse in the case of falling inflation.
Inflation-Linked Bonds: A Safe-Haven In 2017 ?
Miguel Ángel Tramullas | Investment in public debt has traditionally been one of the most popular fixed income assets with both retail and institutional investors. It’s considered as a safe-haven. But in the last few years, it has lost part of its attraction because of lower interest rates which in some places are now in negative territory. To protect themselves, many countries like the US, Japan, the UK, France, Italy and also Spain have begun to issue inflation-linked bonds.